Final year transfer to unused TESSA acct?

Depends how often they calculate and compound interest. AER 3.30% might mean they pay 0.27% per month, and if it matures on 2nd April, it might mean the calculation months all end on the 2nd. So if you popped in £1800 on Monday (26th Jan) that might give you 8 days interest on 2nd Feb:

8/31 x 0.0027 x £1800 -> £1.25 Then on 2nd March you'd get 0.0027 x £1801.25 -> £4.86 and on 2nd April you'd get 0.0027 x £1806.11 -> £4.88

So the exercise would net you nearly eleven quid.

The rate isn't spectacular, and you could (just) beat it by putting the same amount into ING, assuming you don't pay tax at the higher rate.

Regardless of the interest, it may well be very worth your while to invest that last 1,800. When your Tessa matures you are allowed to transfer the original capital on to a "Tessa only ISA"; you are not allowed to transfer any interest accumulated in your Tessa. So, if you add that last 1,800 to your Tessa before maturity then that gives you an extra 1,800 that you can shelter in a TOISA for the future (until some future government changes the rules).

- Julian

BUT, by investing now he would be able to have an extra £1800 in a TOISA which could last for years and years and years..........

Thanks for the replies. All have been very useful.

With regard to interest calculations generally, where can I check exactly how often the interest is compounded on any particular account? I've just dug out the original documentation but it doesn't seem to give this info anywhere.

Are the financial institutions legally bound to provide this information? I'm wondering if I've missed it in the small print somewhere.

Thanks again Steve

Indubitably, but unless his quotas for this year and foreseeable future years are already spoken for, he might be better off using a real ISA than the Tessa-Hanger-On variety.

Because the rate is likely not to be the same. New competitive ISAs will tend to spring up only in normal form, and not with a Tessa-twin, won't they?

It'll be in the blurb somewhere, but not necessarily too obvious.

I would have thought so.

You probably have.

In message , Ronald Raygun writes

Ah, that right!

Am I missing something here? I thought that only £600 could be invested in the final year. (£3000 + 3*£1800 + £600 = £9000).

After much searching on the Web for TESSA rules, I see that I am wrong. So sorry.

In message , GPG writes

yes

You can invest up to 1.8k in the last year if you didnt make your full investment in previous years and so long as the total in the last year is no more than 1.8k and the grand total is no more than £9k.